(MoneyWatch) If the U.S. Postal Service collapses, it will be a dark day for sales.Headlines about the postal service spurting red ink should be upsetting for sales pros. The agency reported a $5.2 billion net loss for the third quarter, bringing its fiscal year losses to a whopping $11.6 billion. The debt-ridden agency has lost an average of more than $42 million per day this year.
Here's a tried-and-true idea: Raise the price of postage -- fast. If a private business were losing money, that would be the first idea to consider. Look at how much prices for fuel, food and higher education have changed over the last 10 years.
How bad is the problem? Consider this: Postmaster General Patrick Donahoe says the service was forced to default in August on a $5.5 billion pre-funding bill for retiree health benefits. While USPS is moving forward with its own reform measures, Donahoe hopes Congress passes legislation for comprehensive reform.
So what, you say? We've got email, texting, Twitter, and FedEx (FDX) and UPS (UPS) -- who cares if snail-mail goes away? That's a mistake, and here's why: Postage stamps are the best lead-generation deal in America. Even at twice the price, direct mail is a bargain.
For one, sales prospects are saturated with email. The rate at which message recipients open messages, let alone click through a pitch, is falling. And if prospects are strangers to you, trying to reach them by email constitutes illegal spamming. Telephone out-reach also can cost 16 times what a direct mail piece does, and getting past voicemail is a challenge.
But to make direct mail work as a prospecting tool you need to know how to make an offer. Some direct mail experts say 40 percent of the success is based on targeting the right list, and the another 40 percent is based on making the right offer.
Of course, the offer is not your product or service. The following direct-mail offers work whether you are selling pencils or penthouses, from Apple (AAPL) to Zappos.
1. Free trial: Pulls two-to-one over money-back guarantees
2. Free information: Like white papers, a great tool to get prospects to raise their hand
3. Sample: If they try it they might like it
4. Conditional sale: Send it now, bill me later
5. Club offer: Join the club and get better deals
6. Contests: Use prizes that relate to your product or service
7. Time limit: You must respond within 30 days
8. Guaranteed buy-back: Return in 30 days for a full refund
9. Yes/no/call me maybe: If maybe, send more information
10. Discount: Value already must be established
11. Charter: Be the first for a lifetime of value
12. Piggyback: Buy now and we'll throw in some extras
13. Bounce back: Here's your delivery, what else would you like
14. Free gift with order: Once you have bought, tough to get out
Now just a first-class stamp, even a forever stamp, might not do the trick. A secret of direct mail is the lumpy package. Most people can easily throw away a letter (as much as 90 percent of direct-mail pieces get tossed if the sender isn't recognized), but there is something irresistible about a three-dimensional package. What could be inside? Maybe a gift worth keeping? Better open it.
Varying direct mail lists can impact response rates from 100 to 1,000 percent. While that is key, varying the offer and the packaging can change response rates from 100 to 600 percent, according to my sources in the direct mail industry.
The postal service clearly needs an overhaul that goes well beyond raising the price of stamps. But let's do whatever it takes to save this great prospecting tool.
Image courtesy of Flickr user Donald Lee Pardue